One of the biggest mistakes that businesses make when it comes to running promotions is a lack of planning. If you do not put in the work beforehand, it is likely that you can end up missing the mark.
There are many different elements of planning a promotion. You need to plan with your customers in mind, of course. But you also need to plan internally too, ensuring you have enough stock at the right time and at the right place.
Should you operate a business that tends to have a lot of promotions going on at the same time, it is even more important that you have effective management in place. Your promotions need to be measured and incorporated into your demand plans. All of your teams need to be collaborating effectively to ensure that your objectives are being reached.
The different types of promotions running at businesses today
There are many different types of promotional activities that can take place at businesses today. This means that there is a lot that must be considered.
- What is the purpose of the promotion? This is the first question that you must ask yourself when planning any sort of promotion. Do you aim to get rid of an overstock of a certain product? Do you want to build awareness for your brand? By outlining your goal, you will then be able to put together an effective plan to achieve this. You will also be able to measure the success of the campaign once it is over.
- What sort of deal are you going to offer? You also need to carefully consider what sort of promotion you are going to run at your business. Will you offer buy-one, get-one-free, for example? Do you intend to bundle products together and offer them at a lower price?
- How long is the promotion going to run for? You need to consider the duration of the promotion as well. When will the deal start? When do you intend to end the promotion?
- How much will it cost to run the promotion? You need to spend some time working out the financial side of things. There is a lot that needs to be considered here. Firstly, you need to account for the reduction in the price of your products. Aside from this, you need to think about how much it is going to cost to roll out the campaign from a marketing and logistics point of view as well. This requires careful planning and consideration.
Key questions to ask yourself about your promotions
There are some key questions you can ask yourself to determine if you are planning promotions effectively.
- Do you separate your promotional activities from the rest of your demand plan?
- Do you review the performance of your promotions afterwards?
- Do you engage in third-party promotions?
- Do you assess the impact the promotion will have on the other products in your range?
- Do you account for promotional “aftershocks”?
These are some of the key steps that you need to take when planning for a promotion.
Do you separate your promotional activities from the rest of your demand plan?
This is the first question we posed, and that’s because it is a very important one. You may be wondering what we mean by separating your promotional activities. Well, a demand plan consists of various inputs and decisions. From demand planners to product managers, there are different voices that have input.
The best practice in this regard is to have various inputs in segregated streams of data within your plan, enabling you to understand how the final plan is made up.
The same needs to be applied to promotions. Data should be kept separate so that you know when the demand comes from a promotion.
The benefits do not end there either. You can review the success of a promotion by ensuring that the data is kept separate.
You also need to consider post promotion carefully. There are two impacts that tend to come from a promotion.
The first, and worst-case scenario, is that customers stock up on the lower-priced products, meaning there is a hole after the promotion.
The second, and ideal scenario, is that you keep getting sales at normal price afterwards.
Both possible situations need to be considered when planning the ideal promotion for your business.
Cannibalisation vs Halo Effect
Another factor you need to think about is how your promotion is going to impact any other items within your range.
Higher-priced products may be purchased because a price discount has made that product more appealing, as it has come closer to the price of the lower-priced items.
You can also consider selling products together to stimulate sales of other items.
What sort of promotions are other companies running with your consumer base? This can either stifle or stimulate the sales within your demand plan, and so they need to be considered carefully.
If there is currently a sale on shoes, for example, this can boost the sales of shoe polish or socks.
Reviewing the Promotion
Measuring the success of the promotion is critical. It is not just about determining whether the promotion went well or not. You need to decipher what elements worked and what elements didn’t. Dissecting every part of the campaign will ensure you perform better next time.
For example, you need to look at the timing of the campaign, the sort of deal that was appealed, and whether or not you managed stock correctly and customer expectations. How were other products impacted? This will give you the data and insight that you need to make sure you do better next time.
To conclude, there is no denying that promotions play a vital role in businesses today. However, you need to make sure that you are planning for promotions effectively if you are to see the results you expect. Follow the advice that has been provided above and you can make sure that your promotions are a great success.
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